* Tropical Storm Alex path seen less threat to oil output
* U.S. consumer spending, incomes rise in May supports oil
* Coming up: API oil inventory data on Tuesday (Updates with settlement prices, market activity)
NEW YORK, June 28 (Reuters) - Oil prices slipped from a seven-week high on Monday as Tropical Storm Alex's threat to Gulf of Mexico energy production was perceived to be lower.
A stronger dollar also helped pressure oil prices and counter support from a report showing U.S. consumer spending rose more than expected in May.
"The consumer spending rise was good but the stronger dollar and a little less concern about the storm were why crude finished lower," said Chris Dillman, analyst at Tradition Energy in Stamford, Connecticut.
U.S. crude for August <CLc1> fell 61 cents, or 0.77 percent, to settle at $78.25 a barrel, trading as low as $77.72 and as high as $79.38, the highest intraday price since May 6.
August Brent crude <LCOc1> fell 53 cents to settle at $77.59 a barrel.
Over the weekend, Tropical Storm Alex became the first named storm of the 2010 Atlantic hurricane season.
The U.S. National Hurricane Center said on Monday that Alex was expected to become a hurricane on Tuesday and to hit near the Texas-Mexico border early Thursday. []
Most weather models project a north-of-the-border hit, but the models were still shifting. Earlier Monday, most models forecast the storm would hit south of the border. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Take a Look on hurricane season []
Factbox on Gulf of Mexico operations [] ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
STORM DISRUPTS SOME SUPPLY
While concern over the weather threat eased, it did cause some disruption to supplies.
Mexico closed two of its main Gulf of Mexico oil exporting terminals on Sunday as Alex moved over the Yucatan peninsula, the government said. []
Shell Oil <RDSa.L> said it was shutting output from its western and central Gulf of Mexico assets ahead of the storm. Other companies also began evacuating some offshore workers as a precaution.
"The market is oversupplied. Given the high level of stockpiles, any supply disruptions could be met easily as long as they are short-lived," said Carsten Fritsch, an analyst at Commerzbank.
OPEC Secretary General Abdullah al-Badri on Sunday put the "inventory overhang" and oil held in storage on tankers at about 244 million barrels -- equal to almost three days of global oil demand. []
Ahead of the week's oil inventory reports from industry and government, a Reuters preliminary survey of analysts on Monday forecast crude stocks to have fallen last week. []
U.S. crude oil, gasoline and distillate inventories were at premiums to year-ago levels, according to EIA data for the week to June 18.
CONSUMER SPENDING RISE
U.S. consumer spending rose slightly more than expected in May, a sign of continuing economic recovery, which should eventually boost demand for oil. []
But traders remain cautious about global economic recovery as the June payrolls report's Friday release loomed.
The euro fell broadly as potential funding tensions in Europe this week weighed on the single currency. The dollar index <.DXY>, measuring the greenback's strength against a basket of currencies, strengthened.
A stronger dollar can pressure oil prices, both by making the dollar-denominated commodity more expensive to consumers using other currencies and by moving money out of energy markets and into foreign exchange markets. (Additional reporting by Gene Ramos in New York, Alex Lawler in London and Alejandro Barbajosa in Singapore; Editing by Lisa Shumaker)
